What happens when we run out of social security numbers

This area of the law is so relatively new that there is a dearth of authoritative government rulings, opinion letters, and other forms of official guidance. All of the agency handbooks for employers regarding the new hire laws are still at the "here's what the law says" stage, and all of the references point back to the same untested statutes. "Untested" in this context means no published court opinions directly on point, especially at the appeals court level. What seems to be the most direct agency guidance is on the Web site of the U.S. Department of Health and Human Services, in the National Directory of New Hires section, in the FAQ section for employers - here is the link:
https://www.acf.hhs.gov/css/faq/new-hire-reporting-answers-employer-questions.

14. What information must an employer report?

Of course, that answer does not get the analysis very far, since it merely makes the obvious observation that the new hire report form has a "required field" for the SSN, which in turn is based upon the basic statute (42 U.S.C. 653a). Following is HHS's answer to the author's request for clarification of the interaction between the RFRA and the SSN requirement in the new hire reporting law:

Response (FPLS) - 06/24/2008 03:16 PM

No, we have not undertaken a study regarding how PRWORA and the RFRA interface. 42 U.S.C 653a requires that employers report newly-hired employees' names, addresses, and Social Security numbers. If the employee has a Social Security number, it should be reported; if the employee does not have a Social Security number, we will attempt to locate the person without it.

We regret that we do not have additional information on this topic. For information regarding the new hire reporting laws, please visit ... [https://www.acf.hhs.gov/css/employers/employer-responsibilities/new-hire-reporting].

Thus, it would appear that there is no particular penalty under the federal new hire reporting law if the report does not include an employee's SSN for the reason that the employer does not have it. If a report comes in without such a number, the new hire office will simply go ahead with its mission, which is to keep track of the employee at the new job.

Under Texas law, new hires must be reported to the Attorney General's New Hire Reporting office - the applicable regulation is 1 T.A.C. § 55.303, which includes the SSN as one of seven required data elements (thus echoing the federal law). The latest guidance from the Texas office, quoting HHS directive PIQ-99-05 (issued July 14, 1999), is that failure to provide an SSN is permitted if the employee or applicant submits an affidavit stating that the individual does not have a Social Security number [author's note: no official form exists for such an affidavit]. Of course, that flexibility does not apply to someone who has a number, but refuses to reveal it.

Refusal to Hire Due to Lack of SSN    Top of Page

As to the question of whether an employer may legally refuse to hire an applicant due to failure or refusal to furnish a social security number, courts from around the country generally support an employer's right to refuse to hire an applicant for such a reason. In Seaworth v. Pearson, 203 F.3d 1056 (8th Cir. 2000), cert. denied, 531 U.S. 895, 121 S.Ct. 226 (2000), the Eighth Circuit Court of Appeals held that the IRS requirement that an employer furnish an employee's correct name and SSN with payroll tax documents is sufficient neutral justification for refusal to hire, even if the refusal infringes on an applicant's religious beliefs, and that an employer is not obligated to seek a waiver from the IRS in order to get past that requirement (thus, even though an employer may file an affidavit of reasonable cause for failing to furnish the SSN, it is not bound by any law to do so). The Seaworth court cited other court decisions along the same line: E.E.O.C. v. Allendale Nursing Centre, 996 F.Supp. 712, 717 (W.D. Mich.1998) ("requirement that employee obtain SSN is requirement imposed by law, not employment requirement"); Sutton v. Providence St. Joseph Med. Ctr., 192 F.3d 826, 830-31 (9th Cir. 1999) ("employer not liable for not hiring person who refused for religious reasons to provide his SSN, because accommodating applicant's religious beliefs would cause employer to violate federal law, which constituted 'undue hardship'"); and Ansonia Bd. of Educ. v. Philbrook, 479 U.S. 60, 67, 107 S.Ct. 367 (1986) ("accommodation causes undue hardship whenever it results in more than de minimis cost to employer") (ibid). The Sutton case further noted that in the absence of proof of some kind of collusion with the government, there is no valid RFRA claim against a private sector employer that is simply complying with the law (Sutton, supra at 836-842). A similar decision came in the case of Weber v. Leaseway Dedicated Logistics, Inc., 5 F.Supp.2d 1219 (D.Kan.1998), aff'd in an unpublished opinion, 166 F.3d 1223 (10th Cir. 1999), which held that a trucking company did not have to hire an applicant for a commercial driver position who refused on religious grounds to submit his SSN; according to the court, the SSN was required by both IRS and DOT regulations, and it would have been an undue hardship on the employer to hire the applicant and risk both IRS and DOT penalties. Finally, in Baltgalvis v. Newport News Shipbuilding Inc., 132 F.Supp.2d 414 (E.D. Va. 2001), aff'd in an unpublished opinion, 15 Fed. Appx. 172 (4th Cir. 2001), the court, agreeing with the decisions cited above, ruled that the employer did not violate religious discrimination laws by acting on the basis of IRS requirements regarding the SSN, and that it would have been an undue hardship on the employer to require the company to either seek a waiver from the IRS or use an identifying number other than the SSN.

In an opinion letter dated June 14, 2003, the EEOC agreed with the above court decisions and indicated there would be no problem under Title VII with an employer insisting that an employee give a valid SSN in connection with employment (see https://www.eeoc.gov/foia/eeoc-informal-discussion-letter-101).

Conclusion    Top of Page

While it may be possible for an employer to hire an employee without a social security number and seek a waiver from IRS regulations requiring its use on various payroll tax-related forms, it is by no means clear that other laws, such as new hire reporting statutes and DOT regulations, allow such waivers. On the other hand, it seems very clear that courts around the country will support an employer's decision that it will not hire an employee who fails to give a social security number for use in complying with various government regulations, even if the failure to give the SSN is due to the employee's sincerely-held religious belief.

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